Letter: A Recipe for Personal Crisis

It greatly disturbed me to read in the July 14 Sunday Valley News that a car title loan operation is opening in West Lebanon. As a United Church of Christ pastor, I am well aware of the many Bible verses decrying “usury,” and that’s what high-interest car title lending is.

Staff Writer Warren Johnston’s article describes a new business that will make 10-month loans from $500 to $30,000 with “no credit checks.” Johnston writes that “the loans are secured by “free and clear titles on vehicles,” and that annual interest rates on the loans range from 128 percent to 300 percent. The business owner is quoted as saying, “We have a very high (loan) failure rate — only about 25 percent of our loans get paid back.”

So, who in his or her right mind would take out one of these loans? Probably someone on the economic edge who has an urgent need for cash to address an unforeseen expense of daily living. Logically, would such borrowers have the financial capacity to pay back a loan at an exorbitant 300 percent interest rate? Generally, car title lenders don’t check and don’t care.

If only 25 percent of such borrowers are able to pay back these loans, that means 75 percent of borrowers who secure a loan through the title to their cars have their cars repossessed by the loan operation! Just think about that for a moment. To already be in tough financial straits and then to lose one’s car through a title loan default is a recipe for catapulting a working family into a sustained economic crisis (including a potential job loss, if one loses his or her ability to get to the job).

In my view, triple-digit-interest car title lending preys on economically desperate people and is something about which we should be quite concerned.

West Lebanon — Title Cash of N.H. is opening a new lending operation in the old post office building on Main Street, the business owner said last week. Title Cash started in the state last year and has 15 other New Hampshire locations, including one in Claremont, said Roy Hutcheson, who started the company in 1994 and now operates 200 …